I just don't think this is true for the overwhelming majority of employees, including developers.

Corporations have enough staff that they can lay off hundreds or thousands of workers without a single worry. They can hold out not paying you the rate you want for much longer than you can afford not paying your bills and eating. Eventually, you will accept a lower salary and if you don't there are plenty of others who will. The vast majority of all employed people have next to no leverage compared to the companies that hire them and companies know it.

The large problem with the collusion before was that the 3-4 that already paid top of the market salaries colluded to keep them the same. It doesn’t mean they weren’t still top of the market for someone with a given level of experience.

But a professional in a small team, usually witha bus factor of 1? This means a hard time finding a new employee + months of training, while the old worker probably found a new job before they even quit at the first one.

There are plenty of blogposts from the other side, about "never give a raise to a flight-risk, because their loyalty is already shot". The business strategy is to quietly hire a (typically cheaper) replacement, then fire the uppity employee.

This depends on how happy/able the employee is to leave to find an alternative.

A while ago I was at a trade fair in Germany and happened to see an advert from a jobs website, it read (roughly translated): "Hate your job ... ? It's your own fault!" (ie that you've not yet left the job you claim to hate...)

Must be nice being wealthy. Most people can barely go a single month without a paycheck.

> severance pay or unemployment insurance

Lol. In the UK, severance pay is one week per year of service, i.e. nothing. Unemployment insurance typically covers only specific costs, like mortgages, and can be significantly expensive.

And this is quite good compared to what happens almost anywhere outside of Europe.

> Transaction costs for employer depends

For any well-established business with significant redundancy, these costs are minimal. Only small companies suffer significantly when losing an employee.

Not necessary wealthy. For people with median pay, it is more about financial responsibility. According to EU-SILC data more than half EU population has financial reserves for at lest three months.

> Lol. In the UK, severance pay is one week per year of service, i.e. nothing. Unemployment insurance typically covers only specific costs, like mortgages, and can be significantly expensive.

Here in Czechia it is 2 months notice period, then severance pay is 3 months (for > 2 years of employment), and then 5 months of government unemployment benefits on ~half pay. So 10 months to find a new job.

> For any well-established business with significant redundancy, these costs are minimal

Even in large businesses you can have small teams with domain experts, losing them can be costly.

Most corporate cultures are inherently authoritarian, with money being used as a proxy for power.

Empirically there is plenty of evidence that given a choice, many businesses would rather maintain the power differential and complain about "lack of applicants" than increase pay and suffer a corresponding diminution of authority.

Stock is an even more specific proxy for power, which is why stock options that have real value are usually reserved for those at the top of the hierarchy.

This is also why remote working is unpalatable. Even if it increases productivity it also enhances worker autonomy and reduces the power differential. That's not acceptable in an authoritarian culture.

Attitudes to remote work can be a useful indicator of how central hierarchy is in the culture.

Why does any company every pay more than the legally required minimum, then?

If you have 10 employees and you want to hire 3 more but to do that you have to increase their pay by 25% in relation to others then you might decide not to because this decreases power for everyone (should they find out what you're paying these others)

Oh come on. This is a cynical or Marxist take, but it's pretty obviously untrue. A flea market, farmers market, FB marketplace doesn't have a substantial power imbalance. A market may have a power imbalance, but it is not required. People can exchange goods/services at equal power, and routinely do so. And if I understand economics correctly, that's the purpose of a "free" market: no artificial power imbalances.

It's only later laissez-faire and neoliberal capitalists that turned "free market" synonymous with a lack of regulation and a playground for the biggest and most powerful companies.

Nobody credible disputes the validity of Marx's critiques of capitalism and 'free markets' by the way - they dispute his fantasy called communism.

Thus it can't simultaneously be a Marxist take and be obviously untrue. One of those has to give :)

I'd encourage anyone to read the first chapter of the Communist Manifesto [0] that summarizes his issues with capitalism. It'll take less than 30 minutes and is a great read, unlike the rest of his writings (in my opinion).

[0] https://www.gutenberg.org/cache/epub/61/pg61-images.html

It's like asking "why shouldn't workers work for subsistence income instead of asking for more money?": the obvious answer is "because the only reason they would consider doing so when they don't have a choice"

Being a shareholder requires capital, which the vast majority of people don't have.

Arguments against will be that value "is" what people are willing to pay for them, which is some combination of supply and demand, but I find this just too simple. Technically it's true that the "value" of something is the price someone last paid for it, but then we get situations where we say a Bitcoin is worth 40k usd or whatever tf the price is right now. And then suddenly its value is 20k, and if you ask why you'll get thirty answers, all wrong. Maybe the price was 40k to someone and 20k to someone else, but the value? Nah. And the price alone tells us basically nothing.

The interesting thing for me is the third person. Me, in this case, to whom Bitcoin is worth 0, or less than 0 because I would consider it a labor cost to own a Bitcoin (figuring out a wallet or whatever). How does someone to whom a Bitcoin is worth 40k then then around and say "Bitcoin is worth 40k" to someone like me?

To capitalists trying to nod their heads and say ah the price is high, supply must be down or demand must be up, I say, good luck predicting human behavior, that usually goes great.

For me though I agree with you, the value of goods is some combination of their production costs, in any meaning of the word "value" that matters.

"But what if someone spends an entire lifetime of labor producing a single widget nobody wants? Clearly demand plays a part in value!" I don't know, go away. Why would that happen? Sure, ok, also include in value calculus that hopefully people only make things that people actually want. (the capitalist argument here is, the profit is to be found in the margin between cost to create and the price set by desirability - to which I say exactly, profit should be eliminated)

Edit: someone else had a comment they deleted talking about how profit is necessary so as to have surplus to save in case of equipment failure, I'll paste my response here cause my thumbs put in the labor so by golly I'll get the Payout

Traditionally, are profits sequestered to be used as savings like that? In my experience the equipment breaks and both companies go bankrupt because the executives in the c corp spent the profit on themselves already and are happy to just go find a new investment.

Actually in my experience the other company, the co-op, doesn't go bankrupt, because the workers are smart enough to safeguard their well being with rainy day funds. This might be one of the reasons coops are repeatedly shown to be far more resilient than traditional companies.

While I am not an expert, I remember reading about it on "The Classical School: The Turbulent Birth of Economics in Twenty Extraordinary Lives", by Callum Williams. It made sense to me.

https://www.goodreads.com/en/book/show/49374783

While linking to the sources is useful, I would appreciate any argument correcting the above since, as I said, I am not an expert and it makes perfect sense to me.

This is not true; Marx's model of exploitation (known to modern economists as the Profit-Exploitation Correspondence Model (PECP)) does not concern itself with what demand and offer agree on within a labor negotiation. Marx says that workers do not sell their labor, they sell their labor-time (e.g. X units of time/goods) during which they exercise their labor-power. The discrepancy between the value of the time and the value produced during that time is where this 'exploitation' comes in.

The idea that exploitation is a matter of opinion or agreement adds a moral or justicial spin to what Marx considered to be a fact of the capitalist economy. Whether the people involved are happy with the situation or agree to it does not change this discrepancy of value or its representation in money.

Marxism is explicitly amoral, it does not concern itself with that is morally right. It is a social science that analyses the contradictions within the material world and their consequences.

> The discrepancy between the value of the time and the value produced

I am thinking how can one value this time. If it is valued by the market (how much someone is willing to pay for it) we would end up with the same problem, no?

It must be intrinsically valued, I am assuming.

The capitalist wants to pay as little as possible per hour, but will on average long term not be able to pay less than the cost of living. Capitalists pay just enough so that workers as a class reproduce themselves (so there are more workers), but less than the value the workers produce.

What is the "value"? Well, the prices cannot be explained only in terms of offer and demand (a society with an offer of 100 pens and demand for 100 pens and offer of 100 planes and demand for 100 planes still would not sell pens and planes for the same price) nor entirely because of the price of raw materials (because this only postpones the explanation: from where came the price of the raw materials?). It also cannot be explained only based on subjectivity, because there exists a number, which is a very objective measure, representing the price if you balance offer, demand, assume competition and discard several perturbations. The "value" tries to explain this basis value that later will became the price and show objectively and numerically how the wealth is produced and distributed.

This "value" is measured by Marx as the quantity of labor socially necessary to produce the product. Given a car, the value represented by a car can be measured by the mean time necessary for the workers to produce that car in the industry plus the value transferred by the machines and tools used by those workers (whose value came from the workers that produced these machines and tools). Both manual and intellectual work need to be taken into account and you can also assume that some complex tasks or more intense work can produce more value than simple tasks in the same time.

Given this, you can compare the value produced by a worker with the value of the things that the worker can buy with its salary. This is how Marx measures these things and shows the exploitation in the society.

There is bid price, ask price, and last sale price.

Do they indicate "value" to the specific people making those transactions, bids and asks? Sure. Does it have to be the same for everybody? No, and that's why trade happens.

But that tendency comes with a lot of asterisks.

Not sure why you are getting downvoted though.

Seems like a dangerous analytical framework.

This is literally why one function of the state is to act as a non-market-participant so it can provide a safety net. There are some things markets can't and shouldn't try to do.

The market has been taking care of it for too long, we're getting too fat, we need a few decades of food controlled by the police to get back into shape.

I don’t know if you’ve seen the average American waistline, but yes, this part is absolutely true. Unhealthily so.

You're not helping your argument with this example imo.

If I am a CEO of a remote-first company and it truly doesn't matter for me where the employees are located it makes no sense to overpay for labor in high cost of living area.

So if there's a company A that pays $X in high COL area, and $X/3 in a low COL area. And then there's a company B that pays $X/2 everywhere. Then people from the low COL area would go to the company B, and people from the high COL area would go to the company A. As a result, company B gets the same results 2 times cheaper.

Repeat this process enough times and the salaries will be equalized. Of course it's not immediate, there are companies rigidly set in their ways; there are people who won't move no matter what; there is limited supply of both companies and workers; etc, etc. But eventually the market forces will do their thing.

The assumption dorwi's asking you to make is that moving to Silicon Valley somehow makes you work twice as fast, or that only engineers who work twice as fast live there.

Basically, lunarhustler is making the assumption that humans who can program end up at roughly the same quality no matter where they live or how much you pay them, while dorwi is making the assumption that how much you are paid is directly related to your productive output.

Beyond that, highest paid people I know aren't paid well because they're 5x as productive, they're paid well because they solve really hard problems - the types of problems you don't run into at most companies.

To use an analogy: neurosurgeons aren't expensive because they're really good at "doctoring". Even if you had all the $$$ in the world you wouldn't consult one for a sprained ankle.

After you're necessity for that market equalization is long gone.

We're in a situation where the wealth class can literally wait it out for more than a generation for market conditions they prefer to normalize. The Market is manipulated and owned, and not by us. The tipping point is past, and the majority of society has yet to realize, our only hope at this point probably requires violence and capital destruction, sadly.

And who is 'us' in that comment?

Seems to be all going pretty well.

"Normal people in the western world are better off than they were at any/nearly any given time in the past."

and

"There is a staggering amount of wealth inequality in the western world right now, and there are very concerning signs about what it is doing to our politics, economy, and culture."

Not sure what you mean 'what it is doing to our politics, economy, and culture.'? All those are doing ok as far as I can tell. At least not worse than in the past.

I'm talking about inequality within the developed nations—specifically, the US (I believe it also affects the UK; I don't feel qualified to talk about such effects beyond that, due to lack of information).

As for what's happening with our politics...if you can't see that the current situation is wildly different than it was 40, 20, or even 10 years ago, then I'm sorry, but you have not been paying close attention. We have people proclaiming themselves as actual literal neo-Nazis storming the Capitol building in an attempted coup, in open collaboration with certain members of Congress and the wife of a sitting Supreme Court judge. And while some of the people involved in the Jan 6 coup attempt are, indeed, being convicted as they should be, to my knowledge, none of the politicians who are complicit have been publicly investigated. This is not normal, it is not healthy, and while it is not entirely due to the increasing wealth inequality, to claim that that has no part in the level of polarization today and the rise of extremism...well, it would be an extraordinary claim, and thus require extraordinary evidence to support it.

This is a case where, at least in certain respects, times are provably getting worse than they were before.

If politics are too fuzzy and nebulous for you, look at generational economics: I don't recall the precise figures off the top of my head, but the baby boomers are still holding wealth vastly disproportionate to their share of the demographics, and younger generations have vastly less income and wealth than they did at the same time in their lives, while over the same period, prices of many important things—like homes, health care, and higher education—have all risen much faster than the rate of inflation. The kind of house that someone working minimum wage could have afforded in 1960, they'd now need a white-collar job (probably requiring a college degree) and several years of savings to buy.

You can't just handwave all of that away as "eh, people have complained about times getting worse since the Ancient Greeks".

Can't afford to buy a house or start a family at anything like the rate 50 years ago that's for sure.

You can always afford to start a family. The question is what trade-offs you want to make.

People used to do with less.

It might be there are people who are able and willing to burn money for a long time. Sure as hell it doesn't stop me the startup founder to set whatever salary ranges I believe are efficient.

We don't give people different offers based on where they say they live.

Rather, we have a salary range for a job, and we look for people who are attracted by that salary range. This usually means people in SF, NYC, and other high COL cities disqualify themselves, so we end up hiring many people outside of tech hubs.

In other words, if you simply stop hiring in the top 20% COL cities, you can hire talent at significantly less salary ranges simply because we're not competing with Google, Amazon, etc in Silicon Valley or NYC.

Which allows us to hire a greater quantity of people. E.g. 2 engineers at $150k instead of 1 engineer at $300k.

But the key to this is not making a salary decision based on location. Instead, just set a salary range and you'll find what parts of the country people are willing to work at that range.

I have my home address, but I actually only spend maybe 4-6 months of the year physically located there. This kind of pisses off most employers due to the tax situation as well as them treating it as if I'm gaming the system by being physically located for much of the year in lower cost of living areas (though sometimes I've even gone to higher cost of living areas for months at a tiem).

A situation like this where the salary doesn't really depend on location so it wouldn't be treated like I'm actively trying to game anything would actually be preferred in my situation, and to many others I know as well.

Exactly. We've had multiple employees move to different cities/states during their tenure. That wasn't a problem with us (from an employer perspective) and there was also no expectation that salary would be adjusted in response to a move, since location wasn't factored into the original offer in the first place.

For run of the mill junior-ish employees who are treated as disposable cogs by my company, your strategy worked effectively. So we ended up with junior employees in LCOL or foreign countries (mostly Canada and Mexico) and senior levels in SFBA / NYC.

There is no real equilibrium in markets, only forces that push constantly in one direction (maximizing profits, lowering costs, increasing capital efficiency).

In fact, if you think about it, the upper limit to profit margin is

    profit_margin = (price_sell - price_buy) / price_sell